If approved, Trenton property tax hike would make the city's tax rate the highest in Mercer County

Michael Mancuso/The TimesTrenton, New Jersey's City Hall on East State Street, early in the morning on June 21, 2011.

TRENTON — Jim Gordon never complained about property taxes on his Trenton home.

“I used to think I paid the right amount of property tax,” he said while sitting on the porch of his home in the city’s Island neighborhood. “It was reasonable and I got good services. I was not one of those people who complained about New Jersey property taxes. I am approaching that group now.”

Gordon estimates his city taxes have gone up almost 30 percent in the last three or four years, while at the same time city police were laid off and other city services seemingly deteriorated.

He’s not alone.

The city’s tax rate has soared in the past few years, requiring city homeowners, many of them poor or senior citizens, to pay more and more for city services.

Due to cuts in state aid, a shrinking tax base, high debt load and employee salaries and benefits that increase each year, Trenton has spent the last several years grappling with budget deficits, ranging from a whopping $56 million in 2010 to an estimated $4 million this year. Those budget holes often require tax increases to fill, making Trenton’s municipal tax rate the highest in Mercer County.

Things could get worse this year. In the fiscal year 2013 budget introduced in September, the city’s $186.4 million budget would be supported by $76.9 million in property taxes, an amount that would require a 19-cent tax rate increase. That translates to a 5 percent rate increase, setting the city’s tax rate at $3.88 per $100 assessed value.

Ten years ago, Trenton’s tax rate was just $2.20, showing just how dramatically city taxes have risen in just a few years. State tax records show that even in 2008, just four years ago, the city’s tax rate was roughly $2.48. Since then, proposed tax rates have leapt each year by 20, 30, even 59 cents in 2009, to compensate mainly for drastic state aid cuts.

City taxpayers also pay school, library and county taxes, which are not included in the city tax rate. Trenton’s school system is heavily supported through state aid, however, and county tax figures show 66 percent of taxes collected in Trenton support city government, the inverse of many suburban towns where most tax dollars go to local schools.

Under the projected 19-cent increase, homeowners with property worth the city average of $62,800 would see their annual city taxes increase by $119, to $2,436. Including city, school and county taxes, that total would rise to $3,598 in taxes in 2012-13.

City officials have said they don’t relish tax hikes, but the state Department of Community Affairs, which doles out transitional aid to struggling cities, mandates that municipalities demonstrate financial need to be eligible for the state aid.

Council members have also told worried residents that this year’s tax increase is just proposed, not set in stone. Councilman Zachary Chester said Thursday night he’d like to whittle the tax rate increase down to 5 cents by cutting the city’s budget, suggesting closing two of the city’s four senior centers as just one way to save money and spare taxpayers.

“We’re going to have (some increase), I just don’t want to see it at 19 cents,” he said. “Let’s sit down and go through this budget. The question we have not asked in this city is ‘What can we do without?’”

In comparison, Mercer towns with the next highest municipal tax rates are on Trenton’s border, with proposed tax rates of roughly $1.20 in Hamilton this year and $1.23 in Ewing, which has actually proposed a tax decrease this year.

Trenton officials have announced initiatives to raise revenue in the city, including increasing collection of late or unpaid taxes and revamping the municipal courts system to collect more fees, but the city’s relatively small tax base remains a problem, as does the fact that roughly 50 percent of properties in the city are owned by the government or other tax-exempt organizations.

Trenton’s ratables — the properties that can be taxed — have remained nearly flat over recent years, even as the cost of running the city’s government went up and up.

The city tax levy — the amount of money the city raises through taxes each year — rose $19 million from 2009 to 2012. By comparison, the city’s tax base increased just $669,634 during the same time period, to $1.98 billion in 2012, often requiring taxpayers to make up the difference between the rising amount of money used to run the city each year and its stagnating tax base.

Ewing has almost the same ratable base, but half the population of Trenton and a much smaller budget.

While the tax base has remained nearly the same, the amount of state aid the city receives has been cut drastically after Gov. Chris Christie eliminated the $40 million Capital City Aid program in 2010. Since then, Trenton has received a steadily decreasing amount of transitional and other state aid payments each year, from the $87.6 million in fiscal year 2010 to the $64.8 million expected in fiscal year 2013.